Most trade between Mexico and the United States is intrafirm. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
What is the Fisher Effect? Provide an example. What will be an ideal response? ANSWER All else equal, a rise in a country’s expected inflation rate will eventually cause an equal rise in the interest rate that deposits of its currency offer. Similarly, a fall in the expected inflation rate will eventually cause a […]
Date: September 10th, 2020
The external shock that hit Mexico and other Latin American countries in the early 1980s that caused the Lost Decade was a collapse in world oil prices. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
The two-country, multi-product model differs from the two-country, two-product model in that, in the former A) the relative wage ratio will determine the pattern of trade ( which good is exported by which country. B) which country will export which product is determined entirely by labor productivity data. C) full specialization is likely to hold […]
Date: September 10th, 2020
The U.S. is the world’s largest creditor. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
What is a pollution haven? What will be an ideal response? ANSWER A pollution haven is a country with relatively lax environmental standards or enforcement. In effect, countries with strict standards export activities that pose high environmental risks to countries that are willing to accept the risks.
Date: September 10th, 2020
An exchange of developing country debt for an ownership position in a developing country business is called A) IMF conditionality. B) indirect investment. C) debt-equity swap. D) debt-rescheduling. ANSWER C
Date: September 10th, 2020
Illustrate the effectiveness of monetary policy with fixed exchange rates. What will be an ideal response? ANSWER The required intervention to maintain the fixed exchange rate will undo any effect on income of an increase or decrease in the money supply. Illustrate by shifting LM curve and then explaining how intervention will return LM […]
Date: September 10th, 2020
It is still the conventional wisdom in the U.S. that compliance with NAFTA requirements is having a deleterious effect on U.S. highway safety standards, on U.S. pollution and other environmental standards, and on U.S. jobs. What facts would proponents of an expansion of NAFTA (e.g., to include all of Central and South American countries) need […]
Date: September 10th, 2020
Reform of a country’s trading system, including the reduction or elimination of trade barriers, is an example of A) an orthodox stabilization plan. B) a heterodox stabilization plan. C) economic populism. D) import substitution industrialization. E) structural reform. ANSWER E
Date: September 10th, 2020
